Termes advised a large family office investor on the creation and implementation of a strategy to achieve bond market exposure. Approximately USD 170 million was allocated to bonds through both direct investment in portfolios of individual bonds and collective/special purpose investment funds.
We undertook comparative analysis for funds shortlisted by the client covering share class choice, fund liquidity provisions, fee structures, investment objective, strategy & investment/credit processes, risk management, portfolio exposures (by issuer, duration, credit, geography, industry, sector and currency) and returns.
For direct investment we built software that analysed liquidity and yield characteristics for bonds using real-time market maker data from Bloomberg. The analysis allowed issues to be filtered to remove stale prices and set minimum bid or offered quote sizes. Sample portfolios were created for client consideration optimized to maximise yield subject to concentration, issuer domicile, sector and credit rating conditions.
A snapshot of the client’s preferred portfolio was sent to an agency broker for execution together with liquidity, yield and time-related execution instructions. Trades were monitored in real-time to ensure the positions were implemented successfully.
Equity and debt funding for real estate & private equity
At the start of 2014 when a client needed to refinance an expiring term loan on a large European property portfolio, we worked closely with the Client team, the Asset Manager and the Legal Adviser to survey the market for potential lenders and elicit interest.
A nine-year term loan has since been approved involving two lenders one of whom has been the lead banking counterparty. The amount involved runs to nine figures. We also assisted with the interest rate hedging covering the full term of the new loan.
When selection and appointment of a full complement of other professional parties including legal advisers in multiple jurisdictions, valuers and technical surveyors was needed we played an active and effective part. The project is progressing smoothly, on schedule, within budget and in line with the goals set for us at the start of the process.
We are currently closely participating as consultants on two other fundraising projects for clients, one in West Africa for project finance and the other in North America for venture capital funding.
Establishment of family offices
When an entrepreneur recently sold his business the practical consequences and opportunities for him and his family required detailed consideration. Together we were able to:
- design a long term strategic asset allocation suited to a post exit lifestyle
- establish a charity cheaply, quickly and effectively
- select, appoint and instruct a suitable professional team
- formulate a strategy alongside the client’s investment advisors to invest the liquid net worth
- decide how much money should be established into trust
- allocate funds for the purchase of a house and decide if a mortgage is desirable or necessary
Termes was engaged by a private family-owned multinational civil and mechanical engineering group to assist in a strategic corporate restructuring.
The restructuring was a complex exercise. It had to satisfy several personal and corporate objectives, including the founding shareholders’ wish to secure the interests of their respective families, to establish long term alliances with substantial sources of finance and to be compliant with the changing regulatory, commercial and tax environment.
We helped the client to establish a set of requirements for a major international accountancy and tax specialist to 1) review specification, planning and delivery of the restructuring that would resolve all issues related to the current corporate structure, tax and regulatory compliance obligations of the client, its shareholders and executive team and 2) leave behind a small department of permanent staff equipped to take forward the future development of the enterprise without further day-to-day reliance on external resource.
We were closely involved in the selection of the external specialist, negotiation of a fixed price contract with the specialist, management of the project to successful completion and appointment of the permanent internal resource.